Square Wallet Had Everything Going for It. And Now It's Dead

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Square Wallet Had Everything Going for It. And Now It's Dead

Image: Square

It had all the ingredients of The Next Big Thing: a product genius billed as a spiritual heir to Steve Jobs. A radical way of performing an everyday task that leverages the latest wave in mobile hardware. A fun and intuitive design that even delivered a quirky human touch.

But despite having every advantage, Square Wallet is over. The brainchild of Twitter inventor Jack Dorsey, this reinvention of in-person payments for the mobile era just vanished from mobile app stores after Square – Dorsey's other big-name company – pulled it amid a lukewarm response from customers.

The end of Wallet shows that sometimes even great talent, a good idea, and beautiful execution aren't always enough to create the next killer app. Sometimes circumstances beyond the inventive ability of any one person or company get in the way, a scenario that has proven especially true in the case of credit cards. So many are trying – and Square with particular skill – to invent a better way to pay that uses your phone instead of a piece of plastic. But so far, for both customers and merchants, the old way is just good enough that too few are willing to take the risk of jumping into something new.

>So far, for both customers and merchants, the old way is just good enough that too few are willing to take the risk of jumping into something new.

For those of us who used and liked Square Wallet, the lack of interest was always a little surprising. Using your stored credit card information, the app let you check in at a shop and simply pay by giving the cashier your name – no need to pull out your wallet or even your phone. The cashier knew who you were because your picture, which you also stored in the app, would pop up on their register running Square's merchant app. You could even set up Square Wallet to automatically "check you in" when you neared your favorite stores. The experience was a revelation. Here was room to remake the mundane.

In Dorsey's idealistic vision, which he pushed eagerly after Wallet launched in May 2011, the appeal was all about increasing human contact. By taking all the bits of paper, bills, and cruddy pieces of plastic out of the equation, a commercial transaction became more of a pure human interaction. The mechanics fell away, and commerce became about the exchange itself, not the clunky tools normally used to make it happen.

But the gulf between the ideal and the actual proved too wide to cross. Anytime you opened Square Wallet, the app would show the shops nearest to you that would take it as a form of payment. Even in San Francisco's South of Market neighborhood, the epicenter of the city's startup scene – the place where Twitter itself was invented – you would never see more than a smattering of shops that would take it, and the choices were always random. All too often, they weren't the places you really wanted to go.

That lack of options reflects the less-than-pristine competitive environment for Square's mobile payment tech. Since Dorsey and his co-founders started Square in 2009 with a credit card reader that could plug into an iPhone headphone jack, the mobile payments field has become jammed with choices, from startups to big incumbents like PayPal and Intuit. No standard has prevailed, and many retailers have yet to adopt any form of mobile payments at all. Without that ubiquity, Square Wallet was never able to rise above novelty.

It didn't help that Square's biggest retail partner of all never implemented Wallet in full. When Square struck a deal with Starbucks to become the coffee chain's exclusive card-payments processor, the feeling was that Wallet's time had arrived. But unlike every other store, paying with Wallet at Starbucks ended up just being a QR code on your phone that you would scan at the register, no different than Starbucks' own mobile app. Starbucks' payment system was never modified to allow for the full Wallet pay-by-name experience, which would have been the single most dramatic way to drive interest in Wallet among consumers.

Though the core of Square's business has always been providing mobile tech for merchants rather than consumers, the company hasn't given up. Square Wallet is being replaced with Square Order, an app that lets you order ahead from cafes and restaurants. "Square Wallet gave buyers a magical way to pay," Square said in a statement. "We’re taking everything we learned from Wallet and what people love in Wallet and building it into Square Order. We think it's an even better experience that offers buyers more utility." At the same time, Square Order is a more modest version of the Wallet vision – a kind of e-commerce for restaurant orders – and an idea other companies have tried before.

But the question isn't so much which app will finally succeed but whether mobile payments by phone will ever be a big business. The advantages to business owners seem obvious. Instead of bulky cash registers and credit card readers that still look like touchtone phones, you just use the iPad you'd have anyway, or a phone with a card reader you can carry anywhere. Square also competes on fees, analytics, fraud detection, deposit speed, and other merchant backend features, but consumers never see these. What they do see is a cute little Square-made card reader that lets them swipe the piece of plastic they've always used, and really that seems pretty convenient itself.

"Yes, but, but...," you can hear all the disruptive entrepreneurs in SOMA stuttering, "... it's just better." But until one company manages to design a new way to pay that's truly better enough, the no new standard is likely to emerge. To those of us who liked it, Square Wallet seemed like it could be that tipping point. But until a true victor emerges from the mobile payments melee, that thick ream of plastic and paper in our pockets will be the one wallet we can't do without.